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Tether backs Abu Dhabi tokenization startup Kaio in $8m round
Kaio, an Abu Dhabi-regulated tokenization firm, said on April 20 that it raised US$8 million from Tether and other investors to build infrastructure for distributing traditional funds on blockchain networks.
The round brings Kaio’s total funding to US$19 million, with Systemic Ventures joining and Further Ventures, Laser Digital, and Brevan Howard Digital also participating.
Kaio said it packages funds from firms including BlackRock and Hamilton Lane for onchain distribution and plans to expand into credit, structured investments, and exchange-traded funds.
The company expects to launch an onchain fund with Mubadala Capital and said it manages about US$100 million in assets and has processed more than US$500 million in transactions.
🔗 Source: CoinDesk
🧠 Food for thought
Implications, context, and why it matters.
Abu Dhabi’s regulatory framework gives firms legal footing
- KAIO operates under Abu Dhabi Global Market (ADGM), a United Arab Emirates (UAE) financial free zone with a digital asset rulebook built on English common law 1, 2.
- That setup gives investors legal clarity. Brevan Howard Digital is the digital asset arm of hedge fund Brevan Howard. Laser Digital is Nomura’s digital asset business, and its ADGM entity, Laser Digital (AD) Ltd, is authorized by ADGM’s Financial Services Regulatory Authority (FSRA) 3.
- FSRA rules cover virtual assets, digital securities, and Fiat-Referenced Tokens (FRTs), digital tokens that track a government-issued currency. Firms need Financial Services Permission to carry out those activities in ADGM 1.
- Circle, issuer of the USDC stablecoin, has also secured FSRA Financial Services Permission to operate as a Money Services Provider, said Circle 4.
Tether’s investment and regulated stablecoin rails
- Tether’s investment aims to help build a regulated market for its assets, beyond a venture bet.
- Platforms like KAIO may help asset managers link tokenized money market funds with stablecoin systems for collateral use or yield-bearing reserves 3.
- That may open compliant stablecoin demand in institutional treasury work, extending usage beyond crypto trading 3.
- ADGM has approved amendments for Regulated Activities involving Fiat-Referenced Tokens, effective Jan. 1, 2026. Backing regulated market infrastructure there gives Tether a path to fit stablecoin issuance into regulated digital finance 5.
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